Shipbroker Chases Down Payment Due

Persistence pays off for shipbroker's legitimate claim for outstanding financial commission due from time-charterer.

In the latest issue of its Claims Review, International Transport Intermediaries Club (ITIC) recounts the case of a shipbroker owed outstanding commission by time-charterers who were widely thought to be in financial difficulties. The charter party provided that the time-charterers were obliged to deduct the broker’s commission from the hire and pay this directly to the broker. The charterers had deducted commission of EUR 50,514 from the hire, but had only paid Euros 20,000 to the broker.

Then payments suddenly ceased without explanation.
ITIC wrote to the time charterers on behalf of its shipbroker client on two occasions and was advised that payment was to follow. But no money was ever received.

The charterer was then warned that ITIC would consider a ship arrest should the next instalment not be promptly received. This prompted the payment of a further EUR 10,000 - leaving EUR 20,514 still owing.

Payments ceased again. ITIC was advised that it was not possible to arrest the ship against which the commission had been incurred because the debtors were only the time-charterers. However, the charterers had their own fleet of ships, one of which was due to arrive in a jurisdiction where it could be arrested for shipbrokers’ commission. An arrest order was obtained, and this produced another payment of EUR 10,000.

Unfortunately, no further payments were received and it became apparent that the ship on which the arrest order had been obtained was held up at the previous port, so the arrest order could not be served.

An arrest order was therefore obtained to arrest another of the charterer’s fleet. This arrest was effective and the charterer paid the balance owed.
The legal costs were, however, paid by ITIC.